Question 1
Explain how industry sales and industry profits behave over the product life cycle.
At the beginning, the industry profits start from negative while the industry sales start from zero. They increase till the end of market growth stage. Then the industry profits decline while industry sales are still rising. Finally, the industry sales drop rapidly and the industry profits maintain at a minimal amount.
Question 2
Cite two examples of products that you think are currently in each of the product life-cycle stages. Consider services as well as physical goods.
Introduction stage:
Electric car and ebook.
Growth stage:
Blu-ray player and maid services.
Maturity stage:
Cellular phone and insurance services.
Decline stage:
Travel agency industry and LEGO.
Question 4
Explain why individual brands may not follow the product life-cycle pattern. Give an example of a new brand that is not entering the life cycle at the market introduction stage.
A given firm may introduce or drop a specific product during any stage of the product life cycle. A “me-too” brand introduced during the market growth stage, for example, may never get sales at all and suffer a quick death. For instance, Wal-Mart tried to rent DVDs by mail – but the innovator, Netflix, was already established as the market leader. When customers did not see Wal-Mart’s marketing mix as better, it failed to attract enough customers and closed operations.
Question 12
Discuss the social value of new-product development activities that seem to encourage people to discard products that are not all worn out. Is this an economic waste? How worn out is all worn out? Must a shirt have holes in it? How big?
Customer need not to wait for holes on a shirt before discard it due to influence by others in society. The shirt may not popular after a period of time from introduction. I believe it is a fashion and fad trend. It makes the product life even shorter.
Chapter 11
Question 2